The ATO has fired a warning to retirees and trustees at the country's pensions system about scams it sees emerging.

Australia’s tax authority has warned retirees and trustees involved in the country’s superannuation fund pensions saving system about the rise of some planning scams they could be drawn into. 

The Australian Taxation Office fired off the warning yesterday. Already, it has raised concerns about dividend stripping arrangements and contrived arrangements involving diversion of personal services income to an SMSF. 

“If a taxpayer becomes involved in any illegal arrangement, even by accident, they may incur severe penalties, jeopardise their retirement savings and risk losing their rights as a trustee to manage their own fund,” ATO deputy commissioner James O’Halloran said.

The ATO is releasing further information on these arrangements via its Super Scheme Smart programme, which highlights case studies and information packs to warn people about illegal arrangements, and where to go for help.

“We are working hard to shut down illegal arrangements quickly, but the best defence for taxpayers and their advisers is to be aware. Promoters of the arrangements may overtly target SMSF trustees and self-funded retirees, including small business owners and those involved in property development with significant assets,” O’Haloran said. 

“The arrangements may be cleverly disguised to look legitimate, involve a lot of paper shuffling and framed as being designed to give a taxpayer a minimal or zero amount of tax or even a tax refund or concession” O’Halloran said.

“Just because an arrangement is structured in a way which appears to satisfy certain regulatory rules does not mean it is legal. Such arrangements can put SMSFs at significant risk of breaching the superannuation regulatory rules as well as the taxation law,” he added.